Here’s the two-faced ETH scenario as average gas fee hits new low

ambcrypto.com:

Gas prices on the Ethereum network have been a bane to anyone using it over the past year or so. Prices surged to astronomical highs on several occasions during the 2021 bull market. In 2021, transaction fees on the ETH network spiked as much as 470% due to congestion on the network.

But, 2022 might turn out to be different. Now, is that good or bad news for ETH proponents?

Every time an operation occurs on Ethereum’s network, a transaction fee or gas fee is incurred. Every interaction on the Ethereum blockchain demands a certain amount of computational resources from the network. Based on the complexity of the transaction and how quickly the user wants the transaction settled, the gas fee changes.

However, looks like now users are in no rush to complete such transactions. According to Dune Analytics, the average gas fee on the Ethereum network fell to a new low over the past 90 days. At press time, the Median gas price stood at around the 19 Gwei-mark, as shown in the graph below.

Source: Dune Analytics

Given the change in demand and supply, gas prices varied as well. Given the uncertainty and lack of demand, the gas fee once fell to 14 Gwei as network activity fell to a periodic low.

Now, such a decline in the fee structure injects two possible scenarios. The obvious one – It would bring some relief to investors/traders/ETH holders who have faced or rather incurred immense fees. But, here’s another grieving scenario.

One reason for this could be the sustained decline in DeFi usage. The total value locked in DeFi smart contracts went down to $56 billion from $98.4 billion in February 2022. According to DeFi Llama, the DeFi dominance of the ETH blockchain is waning.

Users moved transactions to other blockchains with cheaper